Citation Nr: 0114789
Decision Date: 05/25/01 Archive Date: 05/30/01
DOCKET NO. 00-20 708A ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Atlanta,
Georgia
THE ISSUE
Entitlement to waiver of recovery of an overpayment of
improved disability pension benefits.
REPRESENTATION
Appellant represented by: Georgia Department of Veterans
Service
INTRODUCTION
The veteran had active service from July 1951 to June 1953.
This matter comes before the Board of Veterans' Appeals
(Board) on appeal from a May 2000 decision by the Department
of Veterans Affairs (VA) Regional Office (RO) in Atlanta,
Georgia, that denied waiver of recovery of an overpayment in
the calculated amount of $4,528 because there had been bad
faith on the part of the veteran in creation of the
overpayment.
FINDINGS OF FACT
1. The veteran's spouse began to receive Social Security
benefits in March 1998; the veteran did not notify the VA of
this additional income until January 2000.
2. The veteran's failure to notify the VA of his spouse's
receipt of Social Security benefits in March 1998 was done
with knowledge that the likely consequences of that failure
would be that he would continue to receive a higher rate of
improved disability pension even though he was aware that a
reduction in his improved disability pension was required if
he had an increase in his family income.
CONCLUSION OF LAW
Bad faith on the part of the veteran precludes waiver of
recovery of an overpayment of disability compensation
benefits. 38 U.S.C.A. § 5302 (West 1991); Veterans Claims
Assistance Act of 2000, (VCAA), Pub. L. No. 106-475, §§ 3(a),
4, 114 Stat. 2096, 2097-99 (2000) (to be codified as amended
at 38 U.S.C. §§ 5103A, 5107); 38 C.F.R. § 1.965(b)(2) (2000).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Initially, the Board observes that the VA's duty to assist
claimants has recently been reaffirmed and clarified. See
VCAA. In this regard, the veteran and his representative
have been provided a statement of the case informing them of
what is necessary to establish entitlement to waiver of
recovery of the overpayment of improved disability pension
benefits in the calculated amount of $4,528. The veteran and
his representative have been provided an opportunity to
submit additional argument and additional argument has been
submitted. There is no indication that any additional
evidence exists or that further notification is required.
Therefore, the Board concludes that the VA has complied with
the VCAA.
The record reflects that a March 1991 RO decision found that
the veteran was permanently and totally disabled for pension
purposes. By official letter, dated June 1991, the veteran
was informed that his improved disability pension award had
been approved, effective October 1, 1990. He was informed
that VA paid a pension to make up the difference between
countable annual income and the maximum pension rate. He was
informed of what the maximum pension rate was and how his
countable annual income was calculated. He was also informed
of what income was considered in arriving at his annual
countable income. He was informed that additional benefits
had been included for his spouse and that zero income was
considered from his spouse, including zero Social Security
income from his spouse.
The veteran was notified on multiple occasions thereafter, by
official letters, of the method used to determine his VA
pension rate and the method used to calculate his countable
annual income, including the income of he and his spouse that
was considered in arriving at his annual countable income.
These notices to the veteran also informed him that his VA
pension was directly related to his family's income and that
adjustments in his payments must be made whenever his
family's income changed. Therefore, he must immediately
notify VA any time there was a change in the income that was
reflected on the notice to the veteran and failure to inform
VA promptly of income changes could result in the creation of
an overpayment in his account.
The record reflects that in December 1994 the veteran
submitted a statement regarding his income and enclosed
copies of checks that he and his spouse received. One of the
checks reflects that the veteran was in receipt of Social
Security benefits and one of the checks reflects that his
spouse was in receipt of all SSI in the monthly amount of
$446. A December 1994 eligibility verification report,
submitted by the veteran, reflects that he reported his
Social Security on a line designated for Social Security (not
SSI) and he reported under other (show source), on another
line, his spouse's SSI in the amount of $446.
In March 1996 the veteran submitted an eligibility
verification report again reflecting his monthly Social
Security benefit as well as reflecting a monthly SSI benefit
for his spouse on a separate line. In January 1997 he
submitted a eligibility verification report again reflecting
that he was in receipt of monthly Social Security benefits
and indicating that his spouse was not in receipt of Social
Security benefits, nor did he report that she was in receipt
of SSI.
A January 1997 letter to the veteran again informed him of
his pension rate as well as his countable annual income and
the income upon which his countable annual income was based.
This letter reflects that it was based upon zero Social
Security benefits from the veteran's spouse and that his VA
pension depended upon total family income which included his
income and that of any dependents. He was informed that VA
must adjust his payments whenever his income changed and he
must immediately notify VA if income was received from any
source other than that shown in the letter. The veteran's
failure to promptly inform VA about income changes might
create an overpayment which would have to be repaid.
A February 1998 VA letter to the veteran again informed him
of the countable annual income upon which his VA pension was
based, as well as continuing to provide notice regarding the
need to inform VA of any change in his family income. A
February 1999 VA letter to the veteran notified him of the
countable annual income upon which his VA pension was based,
including indicating that zero Social Security from his
spouse was considered.
In January 2000 the veteran submitted an eligibility
verification report reflecting that his spouse was in receipt
of Social Security benefits (not SSI). Upon inquiry it was
determined that his spouse began to receive Social Security
benefits in March 1998. This resulted in a retroactive
reduction in the veteran's benefit and created the
overpayment in the calculated amount of $4,528.
The law precludes waiver of recovery of an overpayment or
waiver of collection of any indebtedness where there is bad
faith on the part of the person having an interest in
obtaining a waiver of such recovery or the collection of such
indebtedness. 38 U.S.C.A. § 5302. Bad faith "generally
describes unfair or deceptive dealing by one who seeks to
gain thereby at another's expense. Thus, a debtor's conduct
in connection with a debt arising from participation in a VA
benefit/services program exhibits bad faith if such conduct,
although not undertaken with actual fraudulent intent, is
undertaken with intent to seek an unfair advantage, with
knowledge of the likely consequences, and results in a loss
to the government." 38 C.F.R. § 1.965(b)(2).
When the veteran submitted his request for waiver of recovery
of the overpayment, he submitted a financial status report.
In block 36 of that report he indicated that he did not
willfully try to defraud the government. He stated that he
reported his Social Security benefits each year on his
eligibility verification report form and did not realize
there was a difference between SSI and regular Social
Security. When the veteran submitted his notice of
disagreement, following the May 2000 denial of waiver of
recovery of the overpayment, he reported that he did not know
that his wife had been changed from SSI to regular Social
Security or he would have correctly reported it to the VA.
He stated that he did know that SSI is not countable income
for VA pension purposes, so it should not be a great problem
that it was erroneously omitted from an eligibility
verification report. He indicated that he attached a letter
from Social Security indicating that his wife had applied for
regular Social Security in 1998 and indicated that her first
Social Security check came in March 1998.
In the veteran's July 2000 substantive appeal, and in
subsequent argument submitted in October 2000, the veteran
reiterates that he was unaware that his wife had been changed
from SSI to regular Social Security. He indicates that he
was aware that SSI did not count as income for pension and so
did not report it. He also indicates that his wife had never
received an original Social Security award letter and that
his wife had been paid SSI for a number of years before she
was changed to regular Social Security. He was aware that
SSI was not countable income for VA purposes. One thing that
contributed to the length of time before the VA caught the
error, was the change by the VA to report income on an
annualized basis rather than staggered reporting.
With consideration of the veteran's previous reporting
relating to his wife's SSI on a separate line on the
eligibility verification report from his report of his own
Social Security benefits and the eligibility verification
report clearly reflecting that a line was available for
reporting Social Security (not SSI), as well as the VA's
considering the veteran's Social Security benefits as
countable income and not considering his reported wife's SSI
as countable income for purposes of determining the amount of
his pension, the Board concludes that the veteran's statement
in the February 2000 financial status report that he did not
realize there was a difference between SSI and regular Social
Security is not credible. Because the Board concludes that
this statement is not credible, it will be accorded no
probative weight.
With respect to the veteran's statements in the notice of
disagreement and substantive appeal indicating that he did
know that SSI was not countable income for VA pension
purposes, but did not know that his spouse had changed from
SSI to regular Social Security in March 1998, the Board
observes that the record reflects that the veteran had
reported on multiple occasions that his wife was in receipt
of Supplemental Security Income and he was informed on
multiple occasions that zero Social Security Income was being
considered for his spouse. The Board also observes that in
February 1999, following the initiation of the veteran's
spouse's Social Security benefits, the veteran was informed
of the income upon which his award was based. This letter
informed the veteran that zero Social Security income was
considered for his spouse. Finally, when the veteran
submitted his notice of disagreement in May 2000 he submitted
evidence indicating that his spouse applied for regular
Social Security in 1998 and in January 2000 he reported on
his eligibility verification report that his spouse was in
receipt of Social Security (not SSI). With consideration
that the veteran's report in his financial status report has
been found to be not credible, reflecting upon the veteran's
overall credibility, as well as his report in his notice of
disagreement that his spouse had applied for regular Social
Security in 1998 and his affirmative report, in January 2000,
indicating that his spouse was in receipt of regular Social
Security benefits (not SSI), the Board concludes that the
veteran's statement that he did not know that his spouse had
been changed from SSI to regular Social Security is not
credible. Having concluded that this statement is not
credible it will not be accorded any probative value.
It is also observed from the record that the veteran has
previously incurred an overpayment in his account as a result
of wages received. With consideration of his experience with
the previous overpayment as well as the numerous
notifications to the veteran, the evidence is overwhelming
that the veteran was fully aware of his duties with respect
to reporting his family income, consisting of income of he
and his spouse, as well as the consequences of failing to
report changes in that income, including the consequence that
he would continue to receive a greater pension benefit than
which he was entitled to if he did not report increases in
his income. With consideration that the veteran was
affirmatively notified in February 1999 that zero Social
Security benefits from his spouse was considered in arriving
at his VA pension award, during a time that his spouse was
actually in receipt of these benefits, as well as the
conclusion reached above that the veteran's assertions with
respect to his lack of knowledge of any difference between
Social Security benefits and SSI as well as his lack of any
knowledge that his spouse had begun to receive regular Social
Security and evidence of record indicating the veteran's
awareness of a difference between SSI and Social Security and
evidence of record indicating the veteran's awareness of his
spouse's receipt of regular Social Security, a preponderance
of the evidence supports a finding that the veteran's
conduct, in failing to promptly report his spouse's receipt
of regular Social Security benefits was undertaken with the
intent to seek an unfair advantage of the VA with knowledge
of the likely consequences which were his continued receipt
of a larger improved disability pension benefit than to which
he would be entitled if he were to have promptly reported his
wife's receipt of regular Social Security benefits. It was
the veteran's bad faith in failing to promptly report this
benefit for the purpose of seeking unfair advantage that
resulted in a loss to the government by creating the
overpayment in the calculated amount of $4,528.
On the basis of the above analysis, a preponderance of the
evidence reflects that the veteran had knowledge that if he
did not inform VA of his wife's receipt of regular Social
Security he would continue to receive an improved disability
pension benefit at a greater rate than he would if he
informed VA of his wife's receipt of regular Social Security.
As a result of the veteran's deceptive silence he was paid an
amount of improved disability pension benefits greater than
to which he was entitled, resulting in a loss to the
government. Therefore, the veteran acted with bad faith and
waiver of recovery of the overpayment of improved disability
pension benefits is precluded without consideration of equity
and good conscious.
ORDER
Waiver of recovery of the overpayment of improved disability
pension benefits is denied.
MILO H. HAWLEY
Acting Member, Board of Veterans' Appeals